XP will page out stuff it considers that it doesn't need at the moment, including the memory taken by applications, probably defined by the data accessed the least recently being flushed out. You can especially see this in large java applications you leave open when you leave the computer for a while, they will be grey for a long time while everything it needs is paged back in (grey screen of undeath).
The amount of memory being paged is affected by the amount of RAM you have available. For instance, using Memtest, you can see that when you use up all the RAM you have available, a small amount will become available again as more is paged out. In fact, to test the biggest part possible of the RAM you may have to overcommit, so that everything else is paged out, then stop and quickly use only the available RAM.
Ergo, having more than 2GB of RAM will make sure that any application or game that actually wants that much (RTW doesn't) does not have to page out the memory it may be needing at some time => better performance. I'd like an option to tell Windows not to page stuff out until more memory is asked for and not available, if anyone knows...
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